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First Nations leaders in Northern Ontario are preparing for looming federal funding cuts and caps that could slash their budgets in half.

"We’re vulnerable right now," Nishnawbe Aski Nation Grand Chief Harvey Yesno told almost 50 chiefs gathered for a meeting in Thunder Bay on Tuesday. "With the funding cuts that are going to happen, this organization could be bankrupt."

The federal government announced in September that political treaty organizations, such as NAN, will have their core funding capped at $500,000.

'We're going to have to rely on our communities'

Yeso said NAN will deal with the cuts by changing the way it operates, but he sees opportunity.

Being freed from government money, means being free to do real advocacy, he said.

"So we're going to have to rely on our communities to contribute and finance some of the research and perhaps some of the litigation that's going to take place in the future as we promote and defend our rights," Yesno said.

Tribal councils will see their budgets cut in half by 2014 as the federal government eliminates funding for "advisory services."

'A direct attack on First Nations'

The executive director of the Wabun Tribal Council, near Timmins, said that funding helps First Nations do business.

Shawn Batisse said Wabun’s six member First Nations have struck numerous deals with mining and energy companies recently with the help of the tribal council’s advisory services. He sees something "nefarious" in the Conservative’s cuts and the way they’re trickling down over several years.

"To me it seems like it's a broader strategy on weakening First Nations capacity on dealing with things like environmental assessments, dealing with companies, [and business]

agreements," Batisse said.

" It really doesn't make sense," he added. "I think it's a direct attack on First Nations governance and capacity institutions and they're taking that away."